Cash Discounting: What Is It and How Does it Work?
Accepting credit cards is a must, but it can also be costly. With card brand fees constantly rising, small business owners need a way to keep more money in their pocket and into their business. Especially during these challenging times, every cent makes a difference.
What is Cash Discounting?
Cash discounting is a simple program that’s easy to implement and helps offset the cost of accepting credit cards. This app-based program adds a percentage increase to all of your existing prices to cover the processing fees and at the time of the sale, applies a discount equal to the advertised price for customers that pay with cash or check, incentivizing the use of cash.
How is Cash Discounting Different from Surcharging?
Surcharging charges an additional percentage at the time of the sale for customers that pay with a credit card and is more tightly regulated than Cash Discounting. Cash Discounting applies a discount for customers who pay with cash and has fewer rules.
What are the Rules?
Blueswipe will help you implement the program easily and stay in compliance. There are just a few rules:
Be Consistent: Due to 'level playing field' limitations, Cash Discounts must be applied consistently and not unfairly advantage one card brand over another.
Inform the Customer: Signage must be posted at the POS clearly stating Cash Discount is available.
Play Fair: Cash Discount must be a reduction from the regular (advertised/displayed) price when the customer pays with Cash or Check. In other words, you can’t charge an additional fee on top of the advertised price.
Equipment: There are no rules around approved devices, but you will need to download an app to implement the program. Blueswipe can help with that.
What kind of business does this work best for?
Cash Discounting operates well across all industries and is legal in all 50 states. It can be especially beneficial for businesses that accept a variety of payments as you’ll still receive the same profit regardless of how the customer pays. Cash discounting can even be applied to ecommerce business, as you can offer your customers a discount for using ACH or electronic checks (e-checks) for payment.
If you want help setting up a Cash Discounting program for your business or want to learn more about whether it’s a good choice for you, give us a call at 804.977.1797 option 1 or click here to fill out a quick and easy form and we’ll reach out to you.